Deadbeat Illinois: Quicker bill payments from state temporary

ROCKFORD — State government has been a little less delinquent in paying bills in recent months. But the reprieve agencies across the state got as the state paid down some of its past due bills this spring won’t last long, Illinois Comptroller Judy Baar Topinka warns.

ROCKFORD — State government has been a little less delinquent in paying bills in recent months.

But the reprieve agencies across the state got as the state paid down some of its past due bills this spring won’t last long, Illinois Comptroller Judy Baar Topinka warns.

“We’ve been fairly fortunate in recent months,” said Mike Bacon, administrator of the Winnebago County Health Department. “We were, prior to April, somewhere in the range of six months in arrears.”

A stronger-than-expected tax season helped the state temporarily reduce its bill backlog. The comptroller’s office called it an “April surprise” when it got $1.3 billion more than anticipated in tax revenue as taxpayers accelerated payments to take advantage of 2012 federal tax rates.

But that money was spent before it ever reached the state’s coffers.

“As soon as the money comes in, our office is using those dollars to pay down our backlog,” said Brad Hahn, spokesman for the state comptroller’s office.

That surprise revenue helped reduce the bill backlog from $8.5 billion at the start of April to about $6.3 billion today. It helped the state cut the wait time for bill payments down from about six months to one month.

Topinka “has said this repeatedly: Illinois is the only state in the nation where $6 billion in unpaid bills sounds like real progress and where a month of payment delays is something to celebrate,” Hahn said. “The reality is that even with that extra revenue we still owe schools, hospitals, not-for-profits and private businesses in every part of the state.”

The comptroller’s office expects the bill backlog to increase in the coming months, up to about $7.5 billion by August.

“It will continue to rise throughout the fall,” Hahn said. “The unexpected tax revenue was helpful in bringing some relief to vendors, but we still have a long way to go. That revenue did nothing to address the long-term financial challenges that the state has.”

Six months in delays in Medicaid payments caused the Winnebago County Health Department to dip into its cash reserves to pay bills. The department had to cover roughly $200,000 to $300,000 in expenses as it waited for the state, Bacon said. It never forced the health department to delay its own bill payments, borrow money or dip into the county’s general fund reserves to cover the cost of paying bills, Bacon said.

“We’ve come very close to that situation, but thus far haven’t had to do that,” Bacon said.

Page 2 of 2 - A similar situation has played out in neighboring Boone County. Cynthia Frank, administrator with the Boone County Health Department, said state payments are catching up in their office, too. Backlogs that used to stretch back six months are now averaging around three months.

“And (the state’s) given us copies of what to expect and when to expect it,” she said.

The payment delays from the state haven’t impacted programs or services offered by the health department, but Frank said they’ve had to dip into reserve funding to cover payments in the interim.

The state’s delayed payments aren’t the biggest concerns for area health departments. Bacon is concerned about reduction in funding for health department programs at both the state and federal level. In 2011, the Winnebago County Health Department cut 22 jobs through layoffs, retirements and hiring freezes because it lost about $1.6 million in federal and state funding.

“The impact of sequestration is just at the very outset of being felt,” Bacon said. “We’re all hopeful that it isn’t the non-defense, discretionary category of spending that’s going to bear the brunt of making up the debt.”

Bacon said preventative public health programs are vital because they can help reduce the growing cost of health care.

“Rather than focus on treating folks when they become ill, we have to focus on how we keep people well,” Bacon said. “When we’re successful in that, health care costs go down. ... And, of course, most importantly, people live longer, healthier, happier lives.”

*This figure only accounts for unpaid bills received by the comptroller’s office. The figure is estimated to be about $6.3 billion when including bills that have been sent to state agencies, but are yet to be forwarded to the comptroller for processing.

Source: Illinois Comptroller

About this series

Reporters from GateHouse Illinois newsrooms examine the real-world effects of the state’s failure to pay its bills.